As 2014 comes to an end, this year is undoubtedly a turbulent year for the Chinese LED industry, and it is also a year of profound changes. At the end of the year, I will take you to look back at the "hurry year" of the LED industry with eight key words.
The most popular word: first year
Since 2014, the LED industry has been in a state of "warm and cold". On one hand, there is the "first year" that has been constantly promoted since the beginning of the year, and on the other hand, there are the "escape gate" incidents that have been constantly exposed.
The argument that 2014 is the first year of LED lighting development continued from the beginning of the year to the end of the year. In addition, the editor reviewed relevant information and found that not only 2014 was dubbed the first year of LED lighting development, but also 2011 was defined as the first year of LED industry development by the media and industry insiders. Therefore, the editor specifically checked the dictionary: the first year refers to the time when something or time begins to happen. From this definition alone, it is inaccurate to say that 2014 is the first year of LED lighting development.
Of course, the term "first year" reflects the expectations and optimism of industry insiders for the LED lighting market in 2014 to a certain extent. However, when looking back on 2014, the editor can't help but boo that those LED companies that have survived from runaways, closures, and exits may have a more "profound" understanding of the "first year" at this time. As someone in the industry said: I hope the term "first year" will not appear again in 2015.
Therefore, the most popular word in the LED industry in 2014 is "the first year".
The word that runs through the whole year: integration
The 2014 integration mergers and acquisitions that ended from Goertek Acoustics’ acquisition of Japanese companies in January 2014 to December 2014 when Qinshang Optoelectronics held three lighting companies can be said to have run through the beginning and end of 2014. According to incomplete statistics, there were more than 30 mergers and acquisitions in the LED industry in 2014.
The word that best expresses the market: chaos
Although the total output value of the entire LED industry is expected to increase by 30% compared with 2013, market competition has intensified. On the one hand, chaotic price wars will accelerate; on the other hand, the phenomenon of uneven products is serious.
Channel chaos: Everlight executive changes, NVC internal strife, the influx of e-commerce, etc. all reflect the lighting channel chaos in 2014;
Price chaos: The development of the LED industry gradually matures, and the upstream supply chain system of advantageous enterprises gradually stabilizes. Coupled with the increase in their production capacity and market sales share, some companies' products are trying to win a place through price wars;
Products are "chaotic": For LED manufacturers in 2014, e-commerce platforms suddenly emerged, directly breaking records in sales, reaching a new high in a year. However, there are some inevitable problems in e-commerce platforms, which make the LED industry even more chaotic. E-commerce is a public platform, and the source of products is not transparent. Counterfeit products can be disguised as brands, and counterfeit products can be defined as direct sales from manufacturers... Users have no way of identifying fake products after receiving them. E-commerce can make a brand a household name, but it can also allow fake products to be sold far away in rural areas, playing a dual role of "initiator" and "indispensable" for the development and growth of the entire industry.
The most speechless word: run away
On September 16, Sichuan Yuanli Optoelectronics Co., Ltd. did not pay July and August wages as promised because the person who took over Yuanli Optoelectronics at that time was a relative of the "lost boss". The solution that was originally said to be easy to implement (paying employees' wages) suddenly stopped taking care of the boss's relatives.
On September 17, it was determined that Yi Xingshang, the owner of Dongguan Yongxing Electronic Technology Co., Ltd., and his wife Lu Meilian had run away. The police took control of the company, while the labor bureau and lawyers intervened in the investigation.
On October 22, the owner of Zhongshan Hualiang Lighting (Fengguang Legend) lost contact with his relatives. Dozens of suppliers surrounded the factory to collect money, and the police handled the incident on site. It owes more than RMB 20 million in payments to upstream companies, more than RMB 30 million in bank loans, more than RMB 5 million in outstanding payment from agents, and more than RMB 2 million in employee wages (the amount is still being calculated). All that is left is a rented factory building and a bunch of outdated products.
Subsequently, many companies such as Juliang, Xilin Lighting, Zhongshan Qike Lighting, Jinqiutian, and Haosai Lighting joined the ranks of running away. There was a "running wave" in LED lighting for a while, which also triggered a lot of criticism and thinking.
The word that best represents the development of the industry: rising
According to predictions by industry research institutions, the total output value of China's LED industry will reach 345 billion yuan in 2014, a year-on-year increase of 30%. Among them, the output values of LED upstream epitaxial chips, midstream packaging, and downstream applications were 12 billion yuan, 56.8 billion yuan, and 275.7 billion yuan respectively, representing year-on-year increases of 43%, 20%, and 32% respectively.
For enterprises, 2014 is also a year of growth. "In 2014, Dongshan Lighting was growing at a rate of 500%, and its sales targets were exceeded." Dongshan Lighting's key account director Ma Jianyu told reporters.
Of course, we can also see the booming development momentum of the LED industry from the following events that occurred in 2014: Li Ka-shing embraced the LED industry and promoted his "loved son" Nanoleaf, which caused a surge in the expansion of the LED market; Philips split its business unit and went into battle lightly to attack LED lighting; Mainland China's big brother San'an Optoelectronics Electrical production capacity has always been at the forefront. In April this year, it was announced that it would invest an additional 10 billion yuan in the construction of blue-green light epitaxy and chip production lines, with a total scale of 200 MOCVD units (based on 2-inch 54-piece conversion); Hongli Optoelectronics' current packaging production capacity has reached 1,500KK per month, while at the beginning of this year, this number was only 800KK.
The mergers and acquisitions of large enterprises will promote technological change and innovation to a certain extent. If small and medium-sized enterprises want to survive in the competition, they must seek technological breakthroughs, which will increase technological innovation and development. The rapid development of emerging technologies and models such as smart lighting, packaging-free, power-free, and e-commerce have greatly promoted the development of the LED industry.
The most attractive word: e-commerce
In today's era of e-commerce, online shopping has gradually penetrated into lighting life. From the actions of brand manufacturers to extend online channels and open brand flagship stores, it is not difficult to see the huge temptation exuded by online channels.
From January to July 2014, Taobao (including Tmall, the same below) sales of lamps and light sources reached 5.3 billion yuan, a year-on-year increase of 144.43%, of which light sources were 210 million yuan, an increase of 95.4%, and lamps were 5.08 billion yuan, a year-on-year increase of 147%.
In terms of transaction volume, Taobao’s lamps and light sources sold 23.42 million orders, a year-on-year increase of 85.26%, including 6.99 million light sources, a year-on-year increase of 98.99%, and lamps 16.43 million orders, a year-on-year increase of 79.88%; 330,000 products of various types were sold.
According to Taobao statistics, from January to July 2014, the sales of LED light source products (including spotlights) increased by 100.59% compared with the same period last year, reaching approximately 175 million yuan, accounting for 82.76% of the overall light source products. Judging from the number of orders, the cumulative number of orders for LED light source products sold on Taobao in the first seven months of 2014 reached approximately 5.9 million, a year-on-year increase of 122.14%. At the same time, the number of LED products on Taobao increased to 60,000, an increase of 33.22% compared with the same period last year.
In addition, during the "Double 11" period in 2014, the total sales of lighting products in the LED lighting category reached 450 million yuan on that day, an increase of nearly 40% compared to last year. Taking Opple as an example, it completed a pre-sale amount of 25 million yuan on the eve of "Double 11", and the total transaction amount exceeded 94 million yuan.
The most promising word: smart lighting
In 2014, the penetration rate of LED smart lighting in the Chinese market was less than 2%, and product applications were mainly reflected in dimmable LED landscape lights, adjustable color temperature LED street lights and their monitoring. Intelligent lighting has different control platforms, control protocols, and light source product specifications. As a result, each company can only take care of itself, making it difficult to form an industrial chain. This is also an inevitable obstacle in the development of the industry at this stage.
However, it is undeniable that LED has laid the technical foundation for the intelligent development of lighting. Not only international lighting giants such as Philips and GE are rushing to launch smart bulbs, but also Internet companies such as Xiaomi and JD.com have begun to deploy LED smart lighting. While many outsiders are waiting for the opportunity to seize the dividends that the LED lighting industry may bring in the future, LED lighting companies themselves are also expanding their territory in the intelligent layout. Not only the entire smart lighting, but also companies in other fields hope to use lighting as an entrance to integrate smart home control.
The most exciting word: Nobel Prize
The Royal Swedish Academy of Sciences awarded the 2014 Nobel Prize in Physics to the team that developed blue LEDs on October 7 in recognition of their invention of blue light-emitting diodes and the resulting new energy-saving light sources. The winners of this Nobel Prize in Physics are Isamu Akasaki (Nagoya University, Japan), Hiroshi Amano (Nagoya University) and Shuji Nakamura (University of California, Santa Barbara, California, USA).
LEDs mainly play an important role in lighting, and blue LEDs are the top priority of white LEDs. The Royal Swedish Academy of Sciences even stated that this invention is very important for the 1.5 billion people around the world who do not have access to electricity. The Nobel Prize recognizes them not only for the transformation they have brought to efficient lighting, but also for the tremendous efforts and hardships behind blue-light LED research.
Enterprise 2014 Impression
Ma Jianyu, Key Account Director of Dongshan Lighting: In 2014, we participated in two outdoor lighting projects: APEC Beijing Water Cube Plaza and Expo Sunshine Valley. Sales achieved a 500% growth. From an industry perspective, ordinary people are becoming more and more aware of LED lamps, and the LED market has begun to develop among civilians.
Dr. Shao Jiaping, Cree China Sales General Manager and Technical Director: The LED industry was very lively in 2014, with various news coming and going, but most of them were just normal adjustments to market cycles, corporate operations, and marketing methods. In 2014, there were more innovations in the LED industry than in previous years, including the maturity of high-density LED technology, the light efficiency of high-power LED research and development breaking through the 300 lm/W barrier, the combination of LED with smart lighting technology, visible light communication technology and other emerging fields.
Tang Jun, BYD Lighting LED Application Development Center Manager and Factory Director: The LED industry showed explosive growth in 2014, and competition in the LED industry became increasingly fierce. Faced with fierce competition, the LED industry showed a wave of large-scale mergers and acquisitions. And the current mergers and acquisitions are mainly in the form of strong alliances and complementary advantages.
Lin Xin, general manager of Suzhou Rechi Optoelectronics Technology Co., Ltd.: The rise of new packaging technologies has led to industry reshuffles and mergers and acquisitions.
Jiao Shengjun, Design Director of Jinan Guanghui Lighting Design Co., Ltd.: In 2014, the number of LED companies in the LED industry decreased, but their scale was increasing and their technology was improving.
Huang Tianqing, general manager of Xiamen Qilite Lighting Co., Ltd.: The LED industry is a mixed bag, and low-price competition without a bottom line has brought great harm to the industry.
Zou Jie, deputy general manager of Zhongshan Zhongshuo Lighting Co., Ltd.: "Strengthening the rural market" and "price and quality" are the two most important keywords in the field of absorbent lights in 2014.
Lu Degang, general manager of Shenzhen Liyang Optoelectronics Co., Ltd.: The LED industry concentration increased in 2014, but technically speaking, technological innovation has not changed.
ANNA